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These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.  














Company - From: 1970 To: 1979

This page lists 52 cases, and was prepared on 02 April 2018.

 
Butler v Board of Trade [1970] 3 All ER 593; [1970] 3 WLR 822; [1971] Ch 680
1970
ChD
Goff J
Company, Crime
Goff J discussed the criterion for admissibility of evidence:"If one rejects the bare relevance test, as I have done, then what has to be shown prima facie is not merely that there is a bona fide and reasonably tenable charge of crime or fraud but a prima facie case that the communications in question were made in preparation for or in furtherance or as part of it."
Companies Act 1948 332(3)
1 Citers



 
 Gaiman v The National Association for Mental Health; ChD 1970 - [1970] 3 WLR 42; [1971] Ch 317; [1970] 2 All ER 362
 
In re Barleycorn Enterprises Ltd; Mathias and Davies (a Firm) v Down [1970] Ch 465
1970
CA
Lord Denning MR and Sachs and Phillimore L JJ
Company
The property comprised in a floating charge forms part of the assets of a company for the purposes of paying (1) costs and expenses of winding up as well as (2) preferential debts.
Phillimore LJ said: "Mr Wooton's submission [for the debenture-holder] . . was that if there were . . assets not covered by some floating charge . . then the proper order for payment would be: first, the costs of the winding up; secondly, the preferential debts; and thirdly, the floating charge. On the other hand if there were no free assets and everything was covered by the floating charge, then the order would be: first, the preferential debts; secondly the floating charge; and, thirdly, the costs of the winding up . . I find it very difficult to defend the logic which would make the order of priority as between costs and preferential debts dependent upon whether or not there was a floating charge."
Companies Act 1948 319
1 Citers



 
 In re Jermyn Street Turkish Baths Ltd; ChD 1970 - [1970] 1 WLR 1194; [1970] 3 All ER 57
 
Charterbridge Corporation Ltd v Lloyds Bank [1970] 1 Ch 62
1970


Company
Special considerations arise as to his duties if a director acts in the interests not of the company of which he is a director but of the group of companies of which that company forms part.
1 Citers



 
 Dickson v Pharmaceutical Society of Great Britain; HL 1970 - [1970] AC 403
 
In re Barcelona Traction, Light and Power Co Ltd (Belgium v Spain) (second phase) [1970] ICJ Rep 3
5 Feb 1970
ICJ

International, Company
ICJ The claim arose out of the adjudication in bankruptcy in Spain of Barcelona Traction, a company incorporated in Canada. Its object was to seek reparation for damage alleged by Belgium to have been sustained by Belgian nationals, shareholders in the company, as a result of acts said to be contrary to international law committed towards the company by organs of the Spanish State. The Court found that Belgium lacked jus standi to exercise diplomatic protection of shareholders in a Canadian company with respect to measures taken against that company in Spain. However, it derived from municipal law a limited principle permitting the piercing of the corporate veil in cases of misuse, fraud, malfeasance or evasion of legal obligations.
It is up to the protecting State of the injured national whether and how far to make it available: "The Court would here observe that, within the limits prescribed by international law, a State may exercise diplomatic protection by whatever means and to whatever extent it thinks fit, for it is its own right that the State is asserting Should the natural or legal person on whose behalf it is acting consider that their rights are not adequately protected, they have no remedy in international law. All they can do is resort to national law, if means are available, with a view to furthering their cause or obtaining redress. The municipal legislator may lay upon the State an obligation to protect its citizens abroad, and may also confer upon the national a right to demand the performance of that obligation, and clothe the right with corresponding sanctions. However, all these questions remain within the province of municipal law and do not affect the position internationally. . .
The State must be viewed as the sole judge to decide whether its protection will be granted, to what extent it is granted, and when it will cease. It retains in this respect a discretionary power the exercise of which may be determined by considerations of a political or other nature, unrelated to the particular claim."
1 Citers

[ ICJ ]

 
 Re Holders Investment Trust; ChD 1971 - [1971] 1 WLR 583
 
In re Jermyn Street Turkish Baths Ltd [1971] 1 WLR 1042
1971
CA

Company
The finding of oppression was overturned.
1 Cites


 
Baytrust Holdings Ltd v Inland Revenue Commissioners [1971] 3 All ER 76
1971


Company, Stamp Duty
Whether a scheme of arrangement constituted a reconstruction for stamp duty purposes.
1 Cites

1 Citers



 
 Jones (M) v Jones (RR); 1971 - [1971] 1 WLR 840

 
 Tesco Supermarkets Ltd v Nattrass; HL 31-Mar-1971 - [1971] CLY 10538; [1972] AC 153; [1971] 2 WLR 1166; [1971] 2 All ER 127; [1971] UKHL 1
 
Regina v Andrews-Weatherfoil Ltd [1972] 1 WLR 118; [1972] 1 ALL ER 65
1972
CACD
Eveleigh J
Criminal Practice, Company
For so long as it is possible for persons concerned in a single offence to be tried separately, it is inevitable that the verdicts returned by the two juries will on occasion appear to be inconsistent with one another. Eveleigh J: "It is necessary to establish whether the natural person or persons in question have the status and authority which in law makes their acts in the matter under consideration the acts of the company so that the natural person is to be treated as the company itself."
1 Citers



 
 Teck Corporation Ltd v Millar; 1972 - [1972] 33 DLR (3d) 288; (1972) 33 DLR 288
 
Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443
1972

Roskill J
Trusts, Company
Mr Cooley was the managing director of the claimant. His duties included procuring business in the field of developing gas depots. The company had unsuccessful negotiations with the Eastern Gas Board for the development of four depots. However, the Gas Board were not prepared to let the contracts to the company. The Gas Board subsequently approached Mr Cooley in his private capacity; and indicated that they would be prepared to contract with him personally. In the course of the meeting, Mr Cooley acquired knowledge that the company did not have; and would have wanted to have. Mr Cooley therefore resigned his office (on the basis of a false excuse) and entered into the contracts with the Gas Board. Held: He was accountable for the profit. Where a fiduciary obtains a benefit in breach of his fiduciary duty, he is liable to account even if the beneficiary could not itself have obtained that benefit or opportunity. A company director owes a fiduciary duty to report relevant information of concern to the company: "Information which came to [the director] while he was managing director and which was of concern to [the company] and was relevant for [the company] to know, was information which it was his duty to pass on to [the company] because between himself and [the company] a fiduciary relationship existed …" and "Therefore, I feel impelled to the conclusion that when the defendant embarked on this course of conduct of getting information … using that information and preparing those documents … and sending them off…, he was guilty of putting himself into the position in which his duty to his employers, the plaintiffs, and his own private interests conflicted and conflicted grievously. There being the fiduciary relationship I have described, it seems to me plain that it was his duty once he got this information to pass it to his employers and not to guard it for his own personal purposes and profit. He put himself into the position when his duty and his interests conflicted."
1 Citers


 
Re Union Accident Insurance Co Ltd [1972] 1 All ER 1105; [1972] 1 WLR 640
1972
ChD
Plowman J
Insolvency, Company
A provisional liquidator cannot be appointed on a baseless petition. There are two conditions to be met. The first was that the petition must disclose a prima facie case, the second was that there were circumstances that require that a provisional liquidator ought to be appointed. The circumstances were not limited. The fact that the petition was not opposed was one of them. In this case, a prima facie case was established because it was shown that the company could not meet the level of solvency required of insurance companies by statute. The circumstances here required that a provisional liquidator ought to be appointed, and it was in the interest of the public in the fact that sums retained by brokers amounting to a large sum of £300,000 be collected from them. A provisional liquidator was correctly appointed.
It is inappropriate to limit the exercise of the power to appoint a provisional liquidator by restricting it to fixed categories or classes of circumstances or fact, as commercial affairs are complex and circumstances will vary greatly.
Nevertheless, before a winding up order is made, a company's Board of directors retained certain residuary powers which included the authority to instruct solicitors and counsels to oppose the petition, notwithstanding the appointment of provisional liquidators to the company.
Plowman J explained the twofold approach that he proposed to adopt: 'There are two matters though, which seem to be relevant for me to consider. The first is whether the department has made out a good prima facie case for a winding-up on the hearing of the petition. Any views I express about the matter now are of course provisional only because I am not trying the petition at the present time. If the department has not made out a good prima facie case for a winding-up order then clearly I think it would not be right to appoint a provisional liquidator. On the other hand, if the department has made out a good prima facie case for a winding-up order then the second matter for my consideration arises, namely, whether in the circumstances of this case it is right that a provisional liquidator should have been appointed.'
1 Citers


 
Highland Engineering Ltd v Thomson 1972 SC 87
1972


Scotland, Company, Insolvency
The liquidation of a company is treated as the equivalent as bankruptcy to prevent the hardship of a debtor who is also a creditor being forced to pay in full, when he will come in only as a creditor for a dividend for his debt as a result of ranking pari passu with the ordinary creditors.
1 Citers



 
 Ebrahimi v Westbourne Galleries Ltd and Others (on Appeal from In Re Westbourne Galleries Ltd); HL 3-May-1972 - [1975] 235 EG 901; [1973] AC 360
 
In re Wellington Publishing Company Ltd [1973] 1 NZLR 133
1973


Company, Commonwealth
(New Zealand) The company a target of a takeover raised money (including by raising a loan on security of the company's assets). Those were then used to declare lawful dividends which were then declared to the takeover shareholder. Held: The arrangement did not to infringe Section 62 Companies Act 1955. The giving of lawful dividends was just an incident of the company activities as the raising of lawful loans and the repayment of lawful debts.
1 Citers


 
Steckel v Ellice [1973] 1 WLR 191
1973

Megarry J
Employment, Company
A salaried partner can be a true partner. Megarry J said that of a salaried partner that "I do not see why he should not be a true partner, at all events if he is entitled to share in the profits on winding up" . . and "Certain aspects of a salaried partnership are not disputed. The term “salaried partner” is not a term of art, and to some extent it may be said to be a contradiction in terms. However, it is a convenient expression which is widely used to denote a person who is held out to the world as being a partner, with his name appearing as a partner on the notepaper of the firm and so on. At the same time, he receives a salary as remuneration, rather than a share of the profits, though he may, in addition to his salary, receive some bonus or other sum of money dependent upon the profits. Quoad the outside world it often will matter little whether a man is a full partner or a salaried partner; for a salaried partner is held out as being a partner, and the partners will be liable for his acts accordingly. But within the partnership it may be important to know whether a salaried partner is truly to be classified as a mere employee, or as a partner . . It seems to me impossible to say that as a matter of law a salaried partner is or is not necessarily a partner in the true sense. He may or may not be a partner, depending on the facts. What must be done, I think, is to look at the substance of the relationship between the parties; and there is ample authority for saying that the question whether or not there is a partnership depends on what the true relationship is, and not on any mere label attached to that relationship."
1 Citers


 
Stekel v Ellice [1973] 1 WLR 191
1973
ChD
Megarry J
Company, Employment
The question of whether persons are in partnership is a question of substance and not form: the label which the parties choose to give to their relationship is not determinative.
Megarry J considered the status of a salaried partner: "Certain aspects of a salaried partnership are not disputed. The term 'salaried partner' is not a term of art, and to some extent it may be said to be a contradiction in terms. However, it is a convenient expression which is widely used to denote a person who is held out to the world as being a partner, with his name appearing as a partner on the notepaper of the firm and so on. At the same time, he receives a salary as remuneration, rather than a share of the profits, though he may, in addition to his salary, receive some bonus or other sum of money dependent upon the profits. Quoad the outside world it often will matter little whether a man is a full partner or a salaried partner; for a salaried partner is held out as being a partner, and the partners will be liable for his acts accordingly. But within the partnership it may be important to know whether a salaried partner is truly to be classified as a mere employee, or as a partner.
I have found it impossible to deduce any real rule from the authorities before me, and I think that, while paying due regard to those authorities, I must look at the matter on principle. It seems to me impossible to say that as a matter of law a salaried partner is or is not necessarily a partner in the true sense. He may or may not be a partner, depending on the facts. What must be done, I think, is to look at the substance of the relationship between the parties, and there is ample authority for saying that the question whether or not there is a partnership depends on what the true relationship is, and not on any mere label attached to that relationship. A relationship that is plainly not a partnership is no more made into a partnership by calling it one than a relationship that is plainly a partnership is prevented from being one by a clause negativing partnership. If, then, there is a plain contract of master and servant, and the only qualification of that relationship is that the servant is being held out as being a partner, the name ‘salaried partner’ seems perfectly apt for him, and yet he will be no partner in relation to the members of the firm. At the other extreme, there may be a full partnership deed under which all the partners save one take a share of the profits, with that one being paid a fixed salary not dependent on profits. Again, ‘salaried partner’ seems to me an apt description of that one. I do not see why he should not be a true partner at all events if he is entitled to share in the profits of a winding-up .”
Partnership Act 1890
1 Citers


 
Re Sick and Funeral Society of St John's Sunday School Golcar [1973] Ch 51
1973
ChD
Megarry J
Company
The rules of a club are essentially contractual iin nature.
1 Citers



 
 Howard Smith Limited v Ampol Petroleum Limited; PC 1974 - [1974] AC 821; [1974] UKPC 3
 
Smith v Gale [1974] 1 All ER 401; [1974] 1 WLR 9
1974
ChD
Goulding J
Company
Three solicitors were in partnership. It was agreed that one would retire. He would take £10,000 on retirement and his share of undrawn profits after an account had been taken. When the accountant certified the profits in line with previous partnership practice, the other partners objected to the sum payable, saying undrawn profits had been appropriated for the purchase of capital assets. New accounts were drawn reflecting this. The retiring partner objected to the result, saying the accountant had already given his certificate under the agreement, and sought a declaration as to what sum was payable. The other partners said that the accountant having given his certificate, the court had no jurisdiction to make any order. Held:There had been no agreement for the second certificate, and the retiring partner was not bound by it. The court had full jurisdiction to make the declaration sought, and would exercise its discretion to make it in order to avoid leaving the retiring partner with no relief without a new certificate. There was no way of restoring the position. Once the error of principle was properly established it would be possible to establish from the draft accounts what sum would properly be certifiable.
1 Cites


 
George Barker Transport Ltd v Eynon [1974] 1 WLR 462
1974
CA
Stamp LJ
Company
It was incontrovertible that "the appointment of a receiver operates as an equitable assignment (by way of charge) of the property of the company to the debenture holder."
1 Citers



 
 Wallersteiner v Moir; 1974 - [1974] 1 WLR 991
 
Wallersteiner v Moir (No 2) [1975] QB 373; [1975] 1 All ER 849; [1975] 2 WLR 389
1975
CA
Buckley LJ, Scarman LJ, Denning LJ
Litigation Practice, Legal Aid, Company
The court was asked whether Moir would be entitled to legal aid to bring a derivative action on behalf of a company against its majority shareholder. Held: A minority shareholder bringing a derivative action on behalf of a company could obtain the authority of the court to sue as if he were a trustee suing on behalf of a fund, with the same entitlement to be indemnified out of the assets against his costs and any costs he may be ordered to pay to the other party. The court said that the minority shareholder could make a Beddoe application in the same way as a trustee and so secure an assurance that he would not be personally liable for any costs. Since he was asserting the company's cause of action on the company's behalf, the Legal Aid provisions prevented the grant of legal aid.
Denning LJ said of someone bringing an action on behalf of the company that "the minority shareholder, being an agent acting on behalf of the company is entitled to be indemnified by the company against all costs and expenses reasonably incurred by him in the course of the agency. It is analogous to the indemnity to which a trustee is entitled from his cestui que trust who is sui juris."
As to the position of a solicitor in litigation, he said: 'It may be worthwhile to indicate briefly the nature of the public policy question. It can, I think, be summarised in two statements; first in litigation a professional lawyer's role is to advise his client with a clear eye and an unbiased judgment; secondly, a solicitor retained to conduct litigation is not merely the agent and adviser to his client, but also an officer of the court, with a duty to the court to ensure that his client's case which he must of course present and conduct with the utmost of care of his client's interests, is also presented and conducted with scrupulous fairness and integrity. A barrister has similar obligations. A legal adviser who acquires a personal financial interest in the outcome of the litigation may obviously find himself in a situation in which that interest conflicts with those obligations.'
. . And "It is a fundamental principle of our law that a company is a legal person, with its own corporate identity, separate and distinct from the directors or shareholders, and with its own property rights and interests to which alone it is entitled. If it is defrauded by a wrongdoer, the company itself is the one person to sue for the damage. Such is the rule in Foss v. Harbottle (1843) 2 Hare 461. The rule is easy enough to apply when the company is defrauded by outsiders. The company itself is the only person who can sue. Likewise, when it is defrauded by insiders of a minor kind, once again the company is the only person who can sue. But suppose it is defrauded by insiders who control its affairs - by directors who hold a majority of the shares - who then can sue for damages? Those directors are themselves the wrongdoers. If a board meeting is held, they will not authorise the proceedings to be taken by the company against themselves. If a general meeting is called, they will vote down any suggestion that the company should sue them themselves. Yet the company is the one person who is damnified. It is the one person who should sue. In one way or another some means must be found for the company to sue. Otherwise the law would fail in its purpose. Injustice would be done without redress."
Scarman LJ said: "The indemnity is a right distinct from the right of a successful litigant to his costs at the discretion of the trial judge; it is a right which springs from a combination of factors - the interest of the company and its shareholders, the relationship between the shareholder and the company, and the court's sanction (a better word would be 'permission') for the action to be brought at the company's expense. It is a full indemnity such as an agent has who incurs expense in the authorised business of his principal."
Buckley LJ said: "[T]here are circumstances in which a party can embark on litigation with a confident expectation that he will be indemnified in some measure against costs. A trustee who properly and reasonably prosecutes or defends an action relating to his trust property or the execution of the trusts is entitled to be indemnified out of the trust property. An agent is entitled to be indemnified by his principal against costs incurred in consequence of carrying out the principal's instructions . . The next friend of an infant plaintiff is prima facie entitled to be indemnified against costs out of the infant's estate . . It seems to me that in a minority shareholder's action, properly and reasonably brought and prosecuted, it would normally be right that the company should be ordered to pay the plaintiff's costs so far as he does not recover them from any other party. In all the instances mentioned the right of the party seeking indemnity to be indemnified must depend on whether he has acted reasonably in bringing or defending the action, as the case may be: see, for example, as regards a trustee, In re Beddoe, Downes v Cottam [1893] 1 Ch 557. It is true that this right of a trustee, as well as that of an agent, has been treated as founded in contract. It would, I think, be difficult to imply a contract of indemnity between a company and one of its members. Nevertheless, where a shareholder has in good faith and on reasonable grounds sued as plaintiff in a minority shareholder's action, the benefit of which, if successful, will accrue to the company and only indirectly to the plaintiff as a member of the company, and which it would have been reasonable for an independent board of directors to bring in the company's name, it would, I think, clearly be a proper exercise of judicial discretion to order the company to pay the plaintiff's costs. This would extend to the plaintiff's costs down to judgment, if it would have been reasonable for an independent board exercising the standard of care which a prudent business man would exercise in his own affairs to continue the action to judgment. If, however, an independent board exercising that standard of care would have discontinued the action at an earlier stage, it is probable that the plaintiff should only be awarded his costs against the company down to that stage . . There is a well established practice in Chancery for a trustee who has it in mind to bring or defend an action in respect of his trust estate to apply to the court for directions: see In re Beddoe, Downes v Cottam [1893] 1 Ch. 557. If and so far as he is authorised to proceed in the action, the trustee's right to be indemnified in respect of his costs out of the trust property is secure. If he proceeds without the authority of an order of the court, he does so at his own risk as to costs. It seems to me that a similar practice could well be adopted in a minority shareholder's action."
Buckley LJ also discussed the role of a legal adviser in litigation and the nature of a contingency fee, saying: "A contingency fee, that is, an arrangement under which the legal advisers of a litigant shall be remunerated only in the event of the litigant succeeding in recovering money or other property in the action, has hitherto always been regarded as illegal under English law on the ground that it involves maintenance of the action by the legal adviser. Moreover where, as is usual in such a case, the remuneration which the adviser is to receive is to be, or to be measured by, a proportion of the fund or of the value of the property recovered, the arrangement may fall within that particular class of maintenance called champerty . . It may, however, be worthwhile to indicate briefly the nature of the public policy question. It can, I think, be summarised in two statements. First, in litigation a professional lawyer's role is to advise his client with a clear eye and an unbiased judgment. Secondly, a solicitor retained to conduct litigation is not merely the agent and adviser to his client, but also an officer of the court with a duty to the court to ensure that his client's case, which he must, of course, present and conduct with the utmost care of his client's interests, is also presented and conducted with scrupulous fairness and integrity. A barrister owes similar obligations. A legal adviser who acquires a personal financial interest in the outcome of the litigation may obviously find himself in a situation in which that interest conflicts with those obligations."
1 Cites

1 Citers



 
 Re Gee and Co (Woolwich) Ltd; 1975 - [1975] Ch 52
 
Fairline Shipping Corp v Adamson [1975] Q B 180
1975


Company
The plaintiffs sued the defendant, a director of a warehousing company, for the negligent storage of perishable goods. The contract was between the plaintiff and the company. Held: The director was personally liable, because he wrote to the customer, and rendered an invoice, creating the clear impression that he was personally answerable for the services. If he had chosen to write on company notepaper, and rendered an invoice on behalf of the company, the necessary factual foundation for finding an assumption of risk would have been absent.


 
 British Eagle International Airlines Ltd v Compagnie National Air France; HL 1975 - [1975] 1 WLR 758; [1975] 2 All ER 390
 
Aluminium Industrie Vaassen B V v Romalpa Aluminium Ltd [1976] 1 WLR 676
11 Feb 1975
ChD
Mocatta J
Company, Contract, Insolvency, Equity
The plaintiffs sold aluminium to the defendant and by a clause in the contract retained their title in the materials sold until payment was received. The purchaser went into insolvent receivership, and the seller sought recovery of the equipment and proceeds of sale of articles made from the materials. The defendants allowed that they had been bailees of the material supplied by the plaintiffs until all debts were paid, but claimed that this was overridden by sales to bona fide purchasers. Held: The clause showed an intention to create a fiduciary arrangement between seller and buyer, and the plaintiffs were entitled to recover the proceeds of sales to third parties.
1 Cites

[ lip ]

 
 Ayerst (Inspector of Taxes) v C and K (Construction) Ltd; HL 1976 - [1976] AC 167
 
Herbert Berry Associates Ltd v Inland Revenue Commissioners [1976] 3 All ER 207
1976
ChD
Templeman J
Insolvency, Company
The collector of taxes distrained on the goods of the company under section 61 TMA 1970 for unpaid taxes and the company entered into a walking possession agreement. Before the collector had sold the goods, and completed the distress, the company entered into voluntary winding-up and a liquidator was appointed. There was a deficiency of £91,000, with preferential creditors of £31,000 and assets of £25,000 including the distrained goods. The goods were later sold with the consent of the collector for £10,500. The collector claimed payment in full of the unpaid tax from the proceeds of sale of the goods. The liquidator contended that the Crown could not assert its right to distrain in order to be paid in full, but by section 319(5) CA 1948 (which concerned preferential payments; the Crown's claim for unpaid tax was a preferential debt) was only entitled to rank pari passu with other preferential creditors. It was argued that since the Crown was distraining for a preferential debt, it was bound by section 319(5) which provided for pari passu distribution among preferential creditors. Held: The collector was entitled to distrain by taking possession prior to the date of the winding-up and then to complete it unless there were special reasons rendering it inequitable for him to do so. No distinction was to be drawn in this context between distraint by a landlord and distraint by the collector. The effect of section 319(5) ranking preferential debts pari passu was not a special circumstance which rendered it inequitable for the distress to be completed. The completion of the distress would not be incompatible with the apparently provisions of CA 1948. CA 1948 distinguishes between distress, whether by a landlord or the Crown, and execution. S228 refers to the four remedies of attachment, sequestration, distress and execution. S371(7) deals with distress by landlords or other person and s325 deals with execution or attachment. Templeman said: "In my judgment, it is not possible to extract distress by the Crown from distress in general in section 319 and include it somehow or other in section 325, which is not dealing with distress."
The court rejected the argument that the collector had abandoned or prejudiced his right of distress by accepting a walking possession agreement: "In my judgment, the property of a company, which is directed by section 302 [now section 107 IA 1986] to be applied for the benefit of the creditors subject to preferential payments, is the property subject to such rights as were exercised prior to the date of the winding-up. At the date of the winding-up in the present case, the goods were in the possession of the collector, and he had power to sell them in order to discharge unpaid taxes. The property of the company at the date of the winding-up consisted only of its right to any surplus realised on that sale."
Taxes Management Act 1970 61 - Companies Act 1948 319(5)
1 Cites

1 Citers


 
Herbert Berry Associates Ltd v Inland Revenue Commissioners
2 Jan 1976
CA

Insolvency, Company

1 Cites

1 Citers



 
 Aluminium Industrie Vaassen B V v Romalpa Aluminium Ltd; CA 16-Jan-1976 - [1976] 1 WLR 676

 
 Tito v Wadell (No 2); ChD 1977 - [1977] 1 Ch 107

 
 Dunford and Elliott v Johnson and Firth Brown; CA 1977 - [1977] 1 Lloyd's Rep. 505
 
Re Bamford Publishers Ltd Unreported, 2 June 1977
2 Jun 1977
ChD
Brightman J
Company
The Secretary of State sought the winding up of a company. The court considered the discretion to accept undertakings as to the company's future conduct: "Quite clearly the Company has been engaged in a disreputable system of trading. The Company has offered a series of undertakings which are designed to secure that its future trading activities are free from objection. These undertakings are not acceptable to the petitioner. In case this matter goes to a higher court it may be helpful if I say something about the undertakings. First, the undertakings offered, assuming as I do that they were implemented, would in my view make the Company’s trading activities free from legitimate complaint however useless those trading activities may be from the point of view of the public interest. The reason that I reject the undertakings is this. Petitions under Section 35 of the Companies Act 1967 are common. Many petitions go by default. A few are opposed. If it were open to a company to oppose a petition under s.35 on the basis that undertakings are offered to regulate the future conduct of the company’s business, the Department of Trade would end with a mass of delinquent companies on probation. It is not the function of this Court, or at any rate of the Chancery Division, to police undertakings given to it except perhaps in the limited field of the welfare of infants. It is for the litigant to bring to the attention of the Court, if he so wishes but not otherwise, any activity which he considers a breach of an undertaking given to the Court If this Court accepted undertakings by a company, which is the object of a s.35 petition, there would be thrown upon the Department of Trade, and not upon the Court, the obligation of policing those undertakings. That is not the function of the Department. I take the view that the Court ought not to pay any attention to undertakings offered by a company, which is the object of a s.35 petition, relating to its future conduct owing to the burden which would thereby be thrown upon the Department of Trade, unless the Department is willing in a particular case that such undertakings should be accepted by the Court; and I do not think that the Department is under the smallest obligation to exhibit such willingness."
Companies Act 1985 35
1 Citers


 
Mentmore Manufacturing Co Ltd v National Merchandising Manufacturing Co Inc (1978) 89 DLR (3d) 195
1978

Mr Justice Le Dain
Commonwealth, Company
(Federal Court of Appeal of Canada) The court described the question whether, and if so in what circumstances, a director should be liable with the company as a joint tortfeasor as "a very difficult question of policy." Mr Justice Le Dain: "On the one hand, there is the principle that an incorporated company is separate and distinct in law from its shareholders, directors and officers, and it is in the interests of the commercial purposes served by the incorporated enterprise that they should as a general rule enjoy the benefit of limited liability afforded by incorporation. On the other hand, there is the principle that everyone should be answerable for his tortious acts."
1 Citers


 
Sowman v David Samuel Trust Sowman v David Samuel Trust [[1978] 1 WLR 22
1978
ChD
Goulding J
Company, Insolvency
When considering a mortgage created by a corporate debtor, the rights under the debenture are not the property of the mortgagor but that of the mortgagee. It was a case where a company which had created the debenture equivalent to the mortgage had gone into liquidation: "Winding up deprives the receiver, under such a debenture as that now in suit, of power to bind the company personally by acting as its agent. It does not in the least affect his powers to hold and dispose of the company's property comprised in the debenture, including his power to use the company's name for that purpose, for such powers are given by the disposition of the company's property which it made (in equity) by the debenture itself. That disposition is binding on the company and those claiming through it, as well in liquidation as before liquidation, except of course where the debenture is vulnerable under [various sections of the Companies Act] or is otherwise invalidated by some provision more applicable to the winding up.
. . The view of the authorities which I have just stated is also fatal, I think, to Mr Monckton's alternative submission that the sale by the receiver is a disposition of the company's property avoided by section 227 of the Companies Act 1948 . . In truth, the rights and powers given by the debenture are themselves property, but not property of the company, and if they are not extinguished by the fact of winding up, their enforcement or exercise is not within the scope of section 227 at all."
Companies Act 1948 227
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Conway v Petronius Clothing Limited [1978] 1 WLR 72; [1978] 1 All ER 185; (1978) 122 SJ 15
1978

Slade J
Company
The court considered, inter alia, the right of a director to inspect his company's records. The applicable statutory provision as to a company's financial records simply laid down a criminal sanction and conferred no civil right enforceable by injunction. All serving directors have the right to inspect the company's records, minutes and accounts, and if desired they may have appropriate expert assistance.
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In re Gerald Cooper Chemicals Ltd [1978] Ch 262
1978
ChD

Insolvency, Company
A business might be found to have been conducted in such a way as to defraud creditors even though only one act of defrauding had been found and one creditor defrauded.
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Newhart Developments Ltd v Co-operative Commercial Bank Ltd [1978] QB 814
1978
CA

Company
The appointment of administrative receivers of a company with a view to realisation of certain charged assets did not deprive the directors of their duties and power to take other proceedings which did not impinge on the activities of the receivers. Even though the directors may lack power to dispose of an asset they might remain under a duty to exploit it for the benefit of the company.
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Re JN 2 Ltd [1978] 1 WLR 183; [1977] 3 All ER 1104
1978
ChD
Brightman J
Company, Insolvency
The court will require any dispute as to the status or locus standi of a party to be resolved in separate proceedings before a winding-up petition is heard. The Court highlighted the extent and applicability of Section 224(1) of the 1948 Act, observing: "There seems to be no doubt that entry on the register is an essential qualification for a contributory who desires to present a petition, if he is not the original allottee and if the shares have not devolved on him through the death of a former holder;
for if neither condition is satisfied, section 224(1)(a)(ii) requires that the shares must have been held by him and registered in his name for at least six months during the preceding 18 months. Plainly, if a transferee is not and never has been on the register, he cannot satisfy that condition. And it would not seem to be an answer that he ought to have been on the register, unless, perhaps, the company has been ordered to place him on the register and has disobeyed that order."
Companies Act 1948 224(1)
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Woolfson v Strathclyde Regional Council [1978] UKHL 5; [1979] JPL 169; (1978) 248 EG 777; 1978 SC (HL) 90; 1978 SLT 159; (1979) 38 P & CR 521
15 Feb 1978
HL
Wilberforce, Fraser of Tulleybelton, Killowen, Kinkel LL
Land, Scotland, Company
The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. Held: The House declined to allow the principal shareholder of a company to recover compensation for the compulsory purchase of a property which the company occupied. the separate personality of a company is a real thing. Lord Keith observed that "it is appropriate to pierce the corporate veil only where special circumstances exist indicating that it is a mere facade concealing the true facts."
Where the evidence shows that a company has been used as a vehicle or device for receiving monies wrongly paid out of a claimant company in breach of a defendant's duty to that company, the receipt by the third party vehicle will be treated as the receipt by the defendant.
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[ Bailii ]

 
 In Re Capital Annuities Ltd; ChD 1979 - [1979] 1 WLR 170
 
Belmont Finance Corporation Ltd v Williams Furniture Ltd [1979] Ch 250; [1978] 3 WLR 712; [1979] 1 All ER 118
1979
CA
Buckley LJ
Trusts, Company
The company directors operated an elaborate scheme to extract value from Belmont by causing it to buy the shares of a company called Maximum at a considerable overvalue. This was a breach of the fiduciary duties of the directors. They sought to recycle the profit on the sale of Maximum so that it could be used to fund the purchase by three companies associated with the directors of Belmont's own shares. This was not only a breach of the directors' fiduciary duty but a criminal contravention of section 54 of the 1948 Act. Belmont went into liquidation, and an action was brought in its name by receivers for damages for breach of duty against the directors who had authorised the transaction, and for an account on the footing of knowing receipt against the three companies. Held: An employee's knowledge is not to be treated as the employer's knowledge: "But in my view such knowledge should not be imputed to the company, for the essence of the arrangement was to deprive the company improperly of a large part of its assets. As I have said, the company was a victim of the conspiracy. I think it would be irrational to treat the directors, who were allegedly parties to the conspiracy, notionally as having transmitted this knowledge to the company; and indeed it is a well recognized exception from the general rule that a principal is affected by notice received by his agent that, if the agent is acting in fraud of his principal and the matter of which he has notice is relevant to the fraud, that knowledge is not to be imputed to the principal. So in my opinion the plaintiff company should not be regarded as party to the conspiracy on the ground of lack of necessary guilty knowledge."
Companies Act 1948 54
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B E Lavender v Witten Industrial Diamonds [1979] FSR 9
1979


Torts - Other, Company

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 Czarnikow Ltd v Centrala Handlu Zagranicznego Rolimpex; HL 1979 - [1979] AC 351
 
In re Bucks Constabulary Widows and Orphans Fund Friendly Society (No 2) [1979] 1 WLR 936
1979


Company, Trusts
In the absence of any contractual obligation otherwise, the funds of a mutual society must be distributed equally on a dissolution.
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Re Camburn Petroleum Products Ltd [1979] 3 All ER 297; [1980] 1 WLR 86
1979
ChD
Justice Slade
Company
The court heard a contributors' petition. The directors were in deadlock with equal shareholdings. The petition was not making good progress, and a creditor's petition was then issued. The shareholder sought a stay. Held: There was a sufficient allegation of insolvency in the petition, and it was right that the petition should be allowed to continue. A creditor in the circumstances mentioned is prima facie entitled to his order and is prima facie not bound to give time to enable the debtor to pay.
Slade J said: "On April 30th 1979 Chevron's [the petitioner in the creditor's petition] petition came before me for first hearing. I was then told of the petition pending in the Manchester District Registry, but was told that for practical purposes proceedings under that petition were frozen…Counsel for Chevron asked for an order under section 231 of the Companies Act 1948 giving leave to Chevron, so far as leave might be necessary to proceed with its petition, and also for an appropriate adjournment for the purpose of dealing with evidence. Counsel for Mr Cooper [one of the director shareholders] asked for leave to be added to the list out of time on the usual undertaking and opposed the making of any order under section 231.
After hearing argument I decided, contrary to the submissions made on behalf of Mr Cooper, that there was a sufficient allegation of insolvency in the petition, and that in all the circumstances it was right that Chevron's petition should be allowed to continue. I therefore made the order sought under section 231and gave certain further directions to which I need not refer."
and "In my judgment, on the facts which I have summarised, the company was at the date of presentation of Chevron's petition and is at the present date manifestly unable to pay its debts within the meaning of section 222(e) and section 223(d) [of the 1948 Act] in as much as it did not and does not have assets available for the discharge of all its current liabilities. Miss Arden on behalf of Chevron, and Mr Cone, on behalf of Mr Kreike [the other director shareholder] who supports Chevron's petition, thus affirm and rely on the present inability of the company to pay its debts. Mr Mann, who opposes the petition on behalf of Mr Cooper does not dispute such inability . ."
Slade J discussed section 346 of the 1948 Act, saying: "Thus I think the Brighton Hotel Company decision throws light on the attitude which the court should generally adopt if faced with a request to make a winding up order in respect of a company shown to be unable to pay its debts, when that request is made by an undisputed unpaid creditor but opposing contributories seek an adjournment. Though there are a number of authorities which give guidance as to the attitude of the court where some creditors support the making of an immediate winding up order and other creditors oppose it, counsel have been unable to find any authority which gives guidance as to such attitude where the contest is between a petitioning creditor on the one hand and contributories on the other hand. I do not however feel much doubt in principle as to what that attitude should be. In the case of a creditor's petition not opposed by other creditors, the general approach of the court was expressed by Lord Cranworth in Bows v Hope Life Insurance and Guarantee Co [1865] 11 HLCas 389,402:
"I agree with what has been said, that it is not a discretionary matter with the court when a debt is established, and not satisfied, to say whether the company should be wound up or not; that is to say if there be a valid debt established, valid both at law and in equity. One does not like to say positively that no case could occur in which it would be right to refuse it; but, ordinarily speaking, it is the duty of the court to direct the winding up."
In other words a creditor in the circumstances mentioned is prima facie entitled to his order and is prima facie not bound to give time to enable the debtor to pay. In my judgment, subject to the discretion given to it by sections 225 and 346 of the Companies Act 1948, to which I have already referred, the attitude of the court should be, and is, essentially unchanged today. While I recognise that it would have the right under those two sections to pay regard to the wishes of contributories, in deciding whether or not to make a winding up order on a creditors petition, or to adjourn the hearing, in my judgment it can, and should ordinarily attach little weight to the wishes of contributories, in comparison with the weight it attaches to the wishes of any creditor, who proves both that he is unpaid and that the company is "unable to pay its debts".
For these reasons while I accept that the court would have jurisdiction to adjourn Chevron's petition, as asked for by Mr Mann, I think it should only do so if it were satisfied that there were exceptional circumstances that justified this course."
Companies Act 1948 231 346(1) - Insolvency Act 1986 195(1)(a) 346(1)
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Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 WLR 614; [1980] 1 All ER 1049; [1983] RPC 1
4 Dec 1979
CA
Goff and Templeman LJJ
Company, Legal Professions, Evidence
Solicitors accepted instructions against a promise of sums on account of costs. After non-payment they began to apply to be removed from the record. The new solicitors sought transfer of the solicitors file, and obtained an order to that effect subject to an undertaking to maintain its condition and to respect the solicitors' lien. The first firm appealed. Held: The practice embodied in the order was appropriate. Where a solicitor discharged himself, a mandatory order should be available. Legal professional privilege will not be upheld if the relevant document came into being as a step in a criminal or illegal proceeding.
Templeman LJ explained why the normal response of the court, when faced with a solicitor who has discharged himself in the course of litigation, even where the solicitor is entitled to discharge himself, is to order the solicitor to hand over the client's papers to the client's new solicitors, subject to an undertaking from the new solicitors to preserve the lien of the original solicitor. This course is usually adopted "in order to save the client's litigation from catastrophe".
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